Budgeting 102
Happy New Year! I hope you have had a chance to take a break and relax over the Christmas holiday! During the fall and Christmas season, I’ve had time to think about budgeting and how I’m going to move forward with it on my channel. I’ve decided that I will start creating weekly budgeting videos again. I know many people are interested and I think it’s very valuable to show people examples of real world scenarios.
I will have set up my 2026 Budget Mom planner on my YouTube channel at some point in December. This will have included my January monthly for 2026.
I thought it would be worthwhile and appropriate to discuss baseline budgeting skills and techniques. I think it’s easy to say it’s too much work, and it always will be until you’ve created the habit of tracking your spending and creating a budget. I have said this before - please remember, creating a budget doesn’t mean you can’t spend your money. A budget is a plan for your money. With plans, come goals.
STEP ONE: Track your money.
You don’t need a fancy budgeting setup. You need paper and a pen or pencil. Go to your bank account daily and write down on paper all the things you’ve spent in one day. You can make two columns - one for income and one for expenses.
DO THIS EVERY SINGLE DAY. You need to develop this into a daily habit.
STEP TWO: What’s your money goal?
Figure out what you want to do with your money. Are you saving for something big like a vehicle or a house? Maybe you want to take a vacation or go to school and you don’t want to get out student loans. (Although student loans aren’t a bad resource to have).
In order to have a plan for your money, you need to figure out what your goal is first. Maybe you don’t care about saving for anything - that’s okay too. Just keep in mind that life changes happen and you might not always be able to work. It’s important to have some kind of back-up for emergencies or if you lose your job for some reason.
STEP THREE: Examine your spending from Step 1 above.
If you want to change your bad behaviours or spending habits, the only way you can do that is by tracking your spending over the course of an entire month. Generally, you want to sum up one month at a time, generally from the start of the month to the very end. That’s a lot of expenses! (That’s why it’s easier to keep up with the process on a daily basis!) At the end of each page, add up all your expenses.
Now, based on your expenditures, create budget categories. For example, food might be food you buy from the store in which you meal plan for, and it might include takeout from fast food joints as well as meals out in a restaurant. Even your daily coffee can be categorized here! You can place it all under the category of food, or keep take out and eating at home separate to see how much you really spend outside the home. You might be surprised - most people grossly underestimate how much they spend on takeout every month.
You can get ideas for budget categories from watching people on YouTube, or just search it online.
STEP FOUR: Figure out your limits and create your budget!
If you’re happy with where you are in your spending, and want to keep things the same, then by all means. You do you boo! If you saw your budget and freaked out a little bit like the rest of us, then I’d say that’s normal.
Now get out a piece of paper (or your budget sheets/book), and write down what you would like to spend for the week and/or month.
Note 1: Your budget should reflect your normal expense routine, unless you have an outlier. This means all that work you put in tracking expenses actually paid off! This is what guides your budget! Unless of course everything looks normal, but you spend ten times more on clothes than you do anything else. Then you might have a problem.
Note 2: Most people do a monthly budget, but I’m used to using The Budget Mom Weekly Paycheque Budget System, so I always track our expenses weekly. I find it so much easier to manage. If you get paid bi-weekly, write down your income on a calendar. Then record your bills. (These are non-negotiable). Anything left after that is money you can allocate to variable expenses (groceries, gas, clothing, personal care, etc), and if you have money left after that you can put it towards debt or savings - whatever your needs or preferences.
Try using these techniques for a few months and see what happens. Remember, it’s ok to fall off the wagon occasionally, but really try to follow your own plan. If you do, it means you’re taking your life, your money and your power back into your own hands. You always have a choice!
Thank you so much for reading today’s blog, and I hope you enjoy the new budgeting videos!
Sandra
